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CASCADE CORPORATION ANNOUNCES FINANCIAL RESULTS FOR THE FIRST QUARTER ENDED APRIL 30, 2010

Cascade Corporation (NYSE: CASC) today reported its financial results for the first quarter ended April 30, 2010.

Overview

· Our net income for the first quarter of fiscal 2011 was $5.7 million ($0.51 per diluted share) compared to a net loss of $12.1 million ($1.12 loss per diluted share) for the first quarter of fiscal 2010.

· Net sales of $94.4 million for the first quarter of fiscal 2011 were 19% higher than net sales of $76.3 million for the first quarter of fiscal 2010, excluding the impact of changes in foreign currency exchange rates.

Q1 Fiscal 2011 vs Q4 Fiscal 2010 Comparison

· Net sales increased 19%, excluding the impact of foreign currencies, during the first quarter of fiscal 2011 compared to the fourth quarter of fiscal 2010 due to higher sales volumes in all regions.

· The consolidated gross profit percentage increased to 29% in the first quarter of fiscal 2011 compared to 23% in the fourth quarter of fiscal 2010. Margins increased in all regions.

· Selling and administrative costs decreased during the first quarter of fiscal 2011 compared to the fourth quarter of fiscal 2010, primarily due to lower costs in North America and Europe.

· Operating income, excluding the impact of European restructuring costs and an environmental charge in North America during the fourth quarter of fiscal 2010, was $9 million higher during the first quarter of fiscal 2011 compared to the previous quarter.

First Quarter Fiscal 2011 Summary

· Summary financial results are outlined below (in thousands, except earnings per share):



· Consolidated net sales increased 19% during the first quarter of fiscal 2011, excluding the impact of foreign currency changes, due to higher sales volumes as a result of improving economic conditions and an improving lift truck market. Details of the change in net sales compared to the prior year first quarter follow (in thousands):



· The consolidated gross profit percentage increased during the first quarter of fiscal 2011 from 19% to 29%, primarily as a result of improved absorption of fixed and variable costs due to increased sales volumes and the benefit of cost cutting measures implemented during fiscal 2010.

· Selling and administrative expenses decreased 7%, excluding foreign currency changes, due to a reduction in personnel, selling and other general costs.

· The provision for income taxes in the first quarter of fiscal 2011 includes tax expense of $555,000 as a result of changes in the tax treatment of Medicare Part D subsidy receipts under the Patient Protection and Affordable Care Act of 2010. In the past, Medicare Part D subsidy receipts have been non-taxable, however payments received after 2012 will be subject to federal income taxes.

Market Conditions

· Percentage changes in lift truck industry shipments, by region, as compared to the prior year are outlined below. Although lift truck unit shipments are an indicator of the general health of the industry and our business over a six to twelve month period, they do not necessarily correlate directly with the demand for our products on a quarterly basis.

Shipments
Q1 FY11 vs Q1 FY10
North America
(26%)
Europe
(16%)
Asia Pacific
19%
China
103%
Global
17%

· Percentage changes in first quarter fiscal 2011 lift truck industry orders, by region, as compared to the previous quarter, are outlined below:

Orders
Q1 FY11 vs Q4 FY10
North America
15%
Europe
19%
Asia Pacific
15%
China
39%
Global
24%
· The lift truck market is recovering based on order and shipment rates. However, it is difficult to predict with certainty how quickly and to what extent the markets will continue to recover. The following is our view of the lift truck industry markets globally based on current conditions:

North America Summary

· Summary financial results are outlined below (in thousands):



· Net sales increased 18%, excluding the impact of currency changes, primarily due to higher sales volumes as a result of improving economic conditions. Details of the change in net sales over the prior year quarter follow (in thousands):



· The gross profit percentage increased to 30% due to improved absorption of fixed and variable costs as a result of higher sales volumes during the current year and a reduction of overhead costs as a result of headcount reductions and other cost cutting measures implemented in the prior year.

· The decrease in selling and administrative costs was due primarily to higher warranty claims experienced in the prior year.

Europe Summary

· Summary financial results are outlined below (in thousands):



· Net sales increased 2%, excluding the impact of currency changes, due to higher sales volumes as a result of slight improvements in economic conditions. Details of the change in net sales over the prior year quarter follow (in thousands):



· During the first quarter of fiscal 2011 we experienced the highest gross profit margin in Europe since fiscal 2009 as a result of our recent restructuring efforts, which included closing production facilities in Germany, The Netherlands and France, changes in management personnel, other workforce reductions within Europe and the movement of certain production activities to Italy.

· Excluding the impact of currency changes, selling and administrative expenses decreased 18% in Europe due to lower personnel, selling and other general costs as a result of restructuring activities.

· Restructuring costs during fiscal 2010 were primarily a result of the closure of our fork manufacturing facility in France. These costs included employee wage and benefit costs of $3.3 million, fixed asset write downs of $912,000 and legal and other restructuring costs of $532,000.

Asia Pacific Summary

· Summary financial results are outlined below (in thousands):



· Net sales increased 8%, excluding the impact of currency changes, due to higher sales volumes as a result of an improvement in economic conditions and a strong lift truck market. Details of the change in net sales over the prior year quarter follow (in thousands):



· The gross profit percentage in Asia Pacific was higher than the prior year due to the benefit of fixed and variable cost absorption as a result of higher sales volumes and fluctuations in foreign currency rates.

· Selling and administrative costs were 21% higher in the current year, excluding the impact of currency changes, due to personnel, warranty and other general costs.

China Summary

· Summary financial results are outlined below (in thousands):



· Net sales increased 89%, excluding currency changes, primarily due to the recovery of the Chinese economy and lift truck market. Details of the change in net sales over the prior year quarter follow (in thousands):



· Gross margin percentages in China increased due to improved absorption of fixed and variable costs as a result of higher sales volumes in the current year.

Other Matters:

· On June 2, 2010, our Board of Directors declared a quarterly dividend of $0.05 per share, payable on July 16, 2010 to shareholders of record as of July 1, 2010.

· Free cash flow, a non-GAAP measure, is defined as cash flow from operating activities less capital expenditures. The following table presents a summary of our free cash flow for the three months ended April 30, 2010 and 2009.



Forward Looking Statements:

This press release contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that a number of factors could cause our actual results to differ materially from any results indicated in this release or in any other forward-looking statements made by us, or on our behalf. These include among others, factors related to general economic conditions, interest rates, demand for materials handling products and construction equipment, performance of our manufacturing facilities and the cyclical nature of the materials handling and construction equipment industries. Further, historical information should not be considered an indicator of future performance. Additional considerations and important risk factors are described in our reports on Form 10-K and 10-Q and other filings with the Securities and Exchange Commission.

Earnings Call Information:

We will discuss our results in a conference call on Monday, June 7, 2010 at 2:00 pm PDT. Robert C. Warren, Jr., President and Chief Executive Officer will host the call. The conference call can be accessed in the U.S. and Canada by dialing (866) 225-8754, International callers can access the call by dialing (480) 629-9692. Participants are encouraged to dial-in 15 minutes prior to the beginning of the call. A replay will be available for 48 hours after the live broadcast and can be accessed by dialing (800) 406-7325 and entering passcode 4303489, or internationally, by dialing (303) 590-3030 and entering passcode 4166329.

The call will be simultaneously webcast and can be accessed on the Investor Relations page of the company’s website, www.cascorp.com. Listeners should go to the website at least 15 minutes early to register, download and install any necessary audio software.

About Cascade Corporation:

Cascade Corporation, headquartered in Fairview, Oregon, is a leading international manufacturer of materials handling products used primarily on lift trucks. Additional information on Cascade is available on its website, www.cascorp.com.

Contact
Joseph G. Pointer
Chief Financial Officer
Cascade Corporation
Phone (503) 669-6300
Email: investorrelations@cascorp.com



















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